Consensus Systems (ConsenSys), a blockchain technology firm founded by Ethereum co-founder JosephLubin, has introduced a system called GridX that will be utilized to connect leading energy grid operators.

Since the beginning of 2017, some of the world’s largest energy grid operators and electricity providers including Sonnen have announced their plans to utilize blockchain technology to distribute renewable energy more efficiently by avoiding “power grid traffic jams”.

“The future of power generation will be composed of millions of small, decentralized power sources, including both prosumers and consumers. The blockchain technology is what makes mass simultaneous exchange between all these parties possible in the first place, and is thus the missing link to a decentralized, completely CO2-free energy future.”

In consideration of the rising demand toward blockchain technology in the energy industry, the ConsenSys team has spent the past nine months in developing GridX, an Ethereum-based blockchain system for energy grid operators that processes payments, registration and distribution of electricity in one single blockchain network.

“We are creating GridX: a distributed electricity provider and market with registration and payments built on the public Ethereum network. Registered customers may use our network to settle payments in real time, significantly reducing both risk and administrative costs by pushing user agency to the edges, where we believe it belongs. And the best part: our network can be built as a layer above the existing grid.”

Essentially, the concept of GridX revolves around the idea of providing a platform wherein smart batteries can operate as independent agents. By allowing the existence of microgrids and implementingblockchaintechnology on top of the existing grid infrastructure, Miller explained that energy grid operators will be able to reduce costs and integrate a more efficient accounting system, as payments are processed on the transparent ledger of Ethereum.

Also, the incorporation of blockchain technology would provide an incentive market for battery operators. For instance, households that operate solar panels can store energy into smart batteries which can then be distributed across a blockchain network. By distributing energy to the network, the solar panel operator will be incentivized with Ethereum’s Ether token.

In regard to the current non-incentive energy distribution market, Miller raised an important question:

“Unfortunately, customers in most places have no incentive to store power. Why, you ask? Because grids aren’t that smart yet. They will buy power back at exactly the same price that they sell it to you. And this is always the same price (in most regions), 24/7/365. So why would you spend $5000 on a battery to store energy for later when you always get the same price on that energy?”

The ConsenSys development team showcased the GridX concept at the Rice University on May 1, after conducting a “semi-secretive” 9-month development phase. The company will continue to work on the development of GridX and focus on finding ways to incentivize energy grid and batteryoperators using the Ethereum protocol.

Author : Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.